Optimisation of the Procurement Process Through the Implementation of SAP ARIBA System in Company X

Procurement is gaining increasing importance in companies, as properly organised procurement can significantly reduce costs and expenses. Every saving in procurement is a direct profit to the company's balance sheet and is much easier to measure than savings obtained in any other company function. In the diploma thesis, I present the importance of goods procurement, the procurement department in the company, procurement planning and the importance of supplier selection and negotiations with them. In the concluding section, I present the findings, add a comment on the current situation in the procurement department, briefly describe future steps in procurement and address the interview questions of employees in the procurement department at company X.

Problem

Procurement is gaining increasing importance in companies, as properly organised procurement can significantly reduce costs and expenses. Every saving in procurement is a direct profit to the company's balance sheet and is much easier to measure than savings obtained in any other company function. Achieving savings in other functions requires more effort and is much more difficult to assess and evaluate after the completion of projects.

Due to major developments in communication and the expansion of globalisation, companies in all markets are facing global competition, which means they are in an increasingly difficult position and must invest more resources in maintaining and improving their market status. In order to manage quality, companies must optimise the quality of input raw materials with which they will still achieve the desired quality of final products. Improving market status is most easily achieved by reducing the company's input costs, for which the procurement department is naturally responsible.

It follows, therefore, that every development in the procurement department must be reflected in cost reduction for the company, naturally taking into account the state of the raw materials market.

Solution and Method

In the diploma thesis, I present the importance of goods procurement, the procurement department in the company, procurement planning and the importance of supplier selection and negotiations with them. A major emphasis in the diploma thesis is on communication with suppliers and ensuring the most favourable procurement conditions using new procurement tools. The thesis particularly highlights the benefits of implementing category management and introducing the SAP Ariba system for executing procurement projects.

The diploma thesis is divided into two parts. In the first theoretical part, I define procurement, describe the tasks of procurement, the objectives of the procurement function and the general organisation of the procurement function. I then present the organisation of procurement in company X, present the currently used tools for work in procurement and communication with suppliers, and describe the newly introduced procurement category management or category management and the organisational changes upon its implementation.

In the second practical part, I describe in detail the functionality of the SAP Ariba system using the example of company X and attempt to assess the impact of the new system on the operation of the procurement process and on relationships with suppliers.

Results

In the concluding section, I present the findings, add a comment on the current situation in the procurement department, briefly describe future steps in procurement and address the interview questions of employees in the procurement department at company X.